INCOME TAXES |
3 Months Ended | |||||||||
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Mar. 31, 2026 | ||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||
| INCOME TAXES | 17. INCOME TAXES
Eightco Holdings Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income.
Forever 8 Fund, LLC, BlockHiro, LLC, Cryptyde Shared Services, LLC, Orb Subsidiary One, LLC, and AI Innovation Capital LLC are limited liability companies which are disregarded entities for income tax purposes and are owned 100% by Eightco Holdings Inc. and Ferguson Containers, Inc., respectively. The Company pays corporate federal, state and local taxes on income allocated to it from BlockHiro, LLC and 8co Holdings Shared Services, LLC.
CW Machines, LLC is a limited liability company for income tax purposes and is owned 51% by Eightco Holdings Inc. The Company pays corporate federal, state and local taxes on income allocated to it from CW Machines, LLC.
Ferguson Containers is taxed as a corporation and pays corporate federal, state and local taxes on income.
Forever 8 UK Ltd. is taxed as a corporation and pays foreign taxes on income.
F8 Fund EU Holdings BV is taxed as a corporation and pays foreign taxes on income.
For the three months ended March 31, 2026 and 2025, income tax (benefit) expense was $ and $(28,793), respectively. The Company has sufficient net operating losses to reduce taxable income for future periods. The Company has recorded a full valuation allowance against its deferred tax assets associated with its net operating losses.
There are no unrecognized tax benefits and no accruals for uncertain tax positions.
The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2021 and thereafter are subject to examination by the relevant taxing authorities.
As of March 31, 2026, the Company had a net operating loss carryforward for federal income tax purposes of approximately $66,723,534. These carryforwards were generated in 2022 and later, and therefore do not expire, but are subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions, and may be utilized to offset up to 80% of taxable income in any future period.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted, which includes significant amendments to the Internal Revenue Code. Key provisions include:
The Company evaluated the impact of the legislation on its consolidated financial statements, including deferred tax assets and liabilities, and incorporated the effects of the enacted changes in these condensed consolidated financial statements for the period ended March 31, 2026, consistent with ASC 740-10-45-15. The Company continues to evaluate the impact of the OBBBA on its effective tax rate in future periods.
EIGHTCO HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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